PARIS (Reuters) - Anxious to avoid the fury that greeted his predecessor's pension reforms, President Francois Hollande will ask more of old people to fix the hole in French retirement coffers but tread gently in doing so.

Even a softly-softly approach will mark the first time a left-wing president has dared to tamper with a system which is one of the sacred cows of France's model of generous welfare provision.

A plan in the works will likely leave intact the official retirement age of 62 but trim annual pension rises, buying Hollande time to try and coax people in their 50s and 60s to work a few more years, officials working on the project say.

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"The French hate the idea of touching the retirement age, it's sacred. And now is not the time for a 'big bang' structural reform -- the system is too stretched to find any compromise," one of Hollande's aides told Reuters.

Pressed on the issue recently, government spokeswoman Najat Vallaud-Belkacem vowed people would not be made to work longer.

Instead, the aim will be to repair the short-term funding gap with nips and tucks that could save a few billion euros a year and study ways to end an entrenched early retirement habit that costs billions more in lost output and contributions.

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While 30-somethings struggle to save, three in five 55 to 64-year-olds already have their feet up, including many public sector employees whose pensions are close to their final pay.

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Given only 19 percent of 60 to 64-year-olds still work, the potential is high. A 2012 European Commission report concluded that even a small rise in old-age employment could substantially reduce France's pension burden, currently 14.4 percent of GDP.

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PERSUASIVE

France has a pay-as-you go pension system with a basic scheme for all and complementary company schemes. Unusually, all those schemes are state-funded.

Workers pay large contributions relative to other countries to underwrite a system that is generous to low-earners and public sector employees. Very few invest in private schemes.

Despite Sarkozy's reform, which means people must be 62 to get a full pension or 67 if they have not worked the statutory 41.5 years, the pot has been depleted by the economic crisis and a surge in unemployment to above 10 percent.
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Partly because of penalties if people work less than the full 41.5 years, French pensions average 60 percent of working-age post-tax income versus 69 percent for OECD-bloc countries.

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Trimming annual pension rises to a percentage point below inflation could save some 2.5 billion euros a year with limited pain, and at a time when many workers face pay freezes.

For the longer-term push to keep people working longer, the split between blue and white-collar workers, exacerbated by an archaic, complex and unfair pension system that pampers those who stay in one job for life, will come into focus.

Rooted in a time when more people worked in mines than in offices, a costly system of different regimes for haphazard groups of jobs like deep sea fishermen, midwives, bailiffs and sewage workers mean that for each 1,000 euros paid in, one person might get back 140 euros a year and another just 60.

Bus drivers get a pension of 2,500 euros a month while a self-employed farmer gets 900 euros. People in tiring jobs have the right to retire earlier and are loath to give it up.

as a comparison, while employment for France is 19% for age 60-64, in the U.S. the rate is 51.7% (January 2013, Series Id: LNU02300096)

Rep. Stephen Lynch (D-Mass.), who is running in the Democratic primary for U.S. Senate in Massachusetts, released a video Monday stating that he supports "small changes" to the Social Security retirement age, but on Wednesday he signed a letter stating he would support no increase in the age at all.

"We will vote against any and every cut to Medicare, Medicaid, or Social Security benefits -- including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need," reads the letter, also signed by Reps. Alan Grayson (D-Fla.) and Mark Takano (D-Calif.) and touted by the Progressive Change Campaign Committee.

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"We do have to recognize that when Social Security was established in 1935, the average life expectancy for women was 65. For men, it was 62, I believe. And, nowadays, for kids born today, the ages are, I think, 87 and 91 for women," he said. "So, obviously, with the life expectancy expanding for beneficiaries, we’re going to have to make some changes there. But I think those are small changes over a long period of time will keep Social Security’s promise to future generations."

Lynch's is roughly right about life expectancy in 1935, but that fact misleads, according to the Social Security Administration: "Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security."

Originally Posted by Idiot Double-Talking Politician (but I repeat myself)

"So, obviously, with the life expectancy expanding for beneficiaries, we’re going to have to make some changes there. But I think those are small changes over a long period of time will keep Social Security’s promise to future generations."

What are these "small changes" if retirement age and COLA are off the table?

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Fifty Shades of Grey is literature the same way Dogs Playing Poker is art. - MPC

Lynch's is roughly right about life expectancy in 1935, but that fact misleads, according to the Social Security Administration: "Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security."

Ah, Demography 101 from good old Part 5. Gee, is Demography still on the SOA syllabus?

Treasurer Wayne Swan announced plans to curb tax concessions for wealthy Australians saving for their retirement amid government efforts to plug a budget deficit and make the A$1.5 trillion ($1.6 trillion) pension system more sustainable.

Earnings over A$100,000 a year for retirees from superannuation assets will now be taxed at 15 percent, Swan told reporters in Canberra today. The changes will affect 20,000 people and save about A$900 million over four years, he said.

“Australians are living longer and in this context the superannuation system needs to be fair and it needs to be sustainable,” Swan said in an e-mailed statement.

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Employers currently contribute 9 percent of workers’ salaries to superannuation funds and the government has said that this levy will rise gradually to 12 percent by 2019, beginning with an increase to 9.25 percent on July 1.

By 2050, for every 10 Australians in retirement there will be 27 in work, down from 50, Shorten told Parliament in 2011 when he introduced legislation enacting the contribution increase.

Move over Monet, money – or the preservation of it – is the nation’s latest, greatest achievement.
(May 3, 2013) -- For a nation known primarily for gastronomy, art, and philosophy, France has done remarkably well in the actuarial stakes.

In a poll by IPSOS conducted last month, the Gallic Republic has said it wants to push pension reform further than its president is keen to do.

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One of the policies Hollande ran in his election campaign was reduce the retirement age from 62 to 60 – reversing a move made by his predecessor Nicolas Sarkozy.

A significant 61% of respondents to the poll said the legal retirement age should be raised.

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Tellingly, 76% of poll respondents said they did not trust Hollande and his government to make the pension system sustainable.